The Market Has Tanked With A Downward Trend In Prices That Seems To Be Gathering Steam

A report from the Canadian Press. “One year ago, B.C. Finance Minister Carole James unveiled a set of tax measures designed to cool an overheated real estate market. She was vague about how to measure the success of her plan: ‘Prices may be lower than they are currently,’ she said at the time. ‘I hope to see a moderation in the market.'”

“It seems she got her wish. As of January, Vancouver area home sales have plunged by 39 per cent from 12 months earlier. Over the past six months, the benchmark price for single family homes in Greater Vancouver has decreased by more than 8 per cent.”

“Jock Finlayson, chief policy officer of the Business Council of B.C., said Ms. James should be bracing for greater losses ahead. ‘If the NDP government wanted a cooler housing market, they must be quite satisfied with how things have developed,’ he said. ‘The market has tanked, notably in the lower Mainland, with big drops in sales and a downward trend in prices that seems to be gathering steam.'”

The South China Morning Post. “Hong Kong home builders could face greater pressure to slash ­prices as the number of completed but unsold new flats they held increased at the end of last year. Analysts said some home builders would offload stock by cutting prices by 5 per cent to 10 per cent from the current levels on completed unsold units, stepping up efforts to lower inventory as the government’s proposed vacancy tax looms.”

“‘The number of unsold homes could not drop amid the correction in the housing market in the second half of last year,’ said Wong Leung-sing, senior associate director of research at Centaline. ‘Quite a number of completed homes unsold will need to be cleared this year if developers want to avoid paying the extra [vacancy] tax.'”

From Domain News on Australia. “Home owners are relisting properties that earlier failed to sell, dropping their asking prices or making minor upgrades to attract buyers as Melbourne’s housing market weakens. Wendy Chamberlain from Chamberlain Property Advocates said vendors were finally catching up to the market, acknowledging they needed to be more realistic on prices and work on their homes to stand out from the crowd.”

“‘I’ve been seeing this for the past 12 to 18 months where an agent will have a property on the market and they’re trying to sell it for an unrealistic price because that’s what the vendor wants,’ Ms Chamberlain said. ‘They [over]cook the campaign and what the vendors do is blame the agent. ‘[Then they] change their agent – and put it back on the market for a more realistic price.'”

“Across Melbourne, total stock was up by 39 per cent in January compared to a year earlier even though new listings were down by 20 per cent over the same time period, as some listings languish for longer. Some regions are seeing even bigger jumps, with Melbourne’s north-east posting a 71 per cent lift in total stock on the market, while the Mornington Peninsula was up 57 per cent and the west up 46 per cent.”

From TV New Zealand. “Economist Cameron Bagrie says the property market in Australia is being closely watched for signs of similar movement in New Zealand. Bagrie says: ‘We are watching closely what’s going on across the Tasman in regard to the Sydney property market, and Melbourne’s. We are starting to see early signs that Auckland’s starting to follow that lead, it’s probably a bit of a lite version at this stage.'”

“He says affordability is an issue in over-inflated markets around the world. ‘If you step back and look at the bigger picture around the globe, you are starting to see the property market cool off in some other what you call over-inflated pretty hot areas, such as Vancouver and London. Affordability is a bigger issue,’ Bagrie told Corin Dann on the Q+A Business Podcast.”

“He added that ‘the Auckland property market is falling as we speak – let’s not sugar coat this – people are out there saying the market is flat, the market is not flat. Auckland house prices are down 3% from their peak about 12 months ago and some wards are already down 5-6% but at this stage it is very orderly, it’s very manageable’. Auckland property prices are up in excess of 120% since 2009, so dropping 3-10% is ‘a bit of a drop in the bucket.'”

“He says the big issue is affordability first and foremost. ‘People have said that the Auckland property market is not going to move backwards because we have got a housing shortage in Auckland – that’s just baloney, because we’ve got a housing shortage and Auckland is the only region across the country where house prices are falling, that basically tells us affordability is the big game in town.'”

“‘Banks are asking a lot more questions not about serviceability of the loan today where today’s interest rates are going to be but it’s about where interest rates could be on average over the next 5, 6, 7 years and that could be up around 5-6% so banks are a lot more focussed on serviceability and they’re asking a lot more questions. This will be become a big story over the next few years as responsible lending rules start to bite.'”

“I’ve been seeing this for the past 12 to 18 months where an agent will have a property on the market and they’re trying to sell it for an unrealistic price because that’s what the vendor wants,’ Ms Chamberlain said. ‘They [over]cook the campaign and what the vendors do is blame the agent. ‘[Then they] change their agent – and put it back on the market for a more realistic price.’”

The selling puke has to lower his asking price else the new listing agent won’t want to list it.

The listing agent has a lot of stake in making a sale and won’t want to waste his time hand holding an ignorant puke who refuses to get real.

The first development I rented a house in from late 2005 – 2010 had a Dude or “ignorant puke” as you would say list his completely remodeled house for $400k in 2006. After about 4 months on the market he got an offer of $375k

Meanwhile, back in the US, residents in high tax states are getting a sense of what it will mean for their bloated state and local budgets to not be subsidized by the rest of the country anymore. With a conventional mortgage on a median priced home gobbling up half the median annual income, losing the tax deduction on top of it likely to significantly reduce the attractiveness of leveraging up to buy overpriced real estate.

The point of the post was that the budgets of those states will not be subsidized by their residents being able to claim inordinately large tax deductions to reduce their federal tax burden. The overall contribution of each state to overall GDP or total federal tax revenue was not addressed in my post. Technically, of course, it is not a subsidy. As a California resident, as much as it is to my advantage to claim larger tax deductions, if I put my self interest aside, it doesn’t seem fair to the rest of the country that just because I live in California I should be granted a much larger deduction on my federal taxes.

99% of the posts I read on boards like this are people “talking up their book.” The logic of their posts all seem to coincidentally correspond with their own self-interest. Your post actually addresses the issue of how much different should your federal tax obligation change from one state to another.
For example: if there are two US citizens with the exact same income, but one lives in California and his neighbor lives right across the state line in Nevada, who should pay more (or less) in federal taxes? The answer is obvious to me, their federal taxes should be the same.
I know people in the home building, mortgage, real estate will disagree with me; but I think the above example should also apply to two neighbors where one rents and the other borrows heavily to “own.” Their federal taxes should be the same. To make it better, two people with the exact same mortgage but one makes $100k/yr and the other makes $400k/yr the tax code subsidizes the later more and at a higher rate (since their deduction applies to a higher tax rate.) And everyone thinks this is great. I don’t get it.
And since I’m up on a soapbox right now, the most 1984 Orwellian “Newspeak” thing I have ever heard is the end of a real estate closing. You sign all the paperwork (and your hand is cramping) confirming that you “bought” a home with a 3% down payment and the real estate agent collects her check and says “Congratulations! You’re a homeowner!”
You don’t own crap. If you had to sell it the next day you’re already down 3%+ because of fees and not to mention you just paid more than anyone else was willing to pay for it. To me, a “homeowner” would be someone without a mortgage, then you would actually “own” the “home.”

This will be become a big story over the next few years as responsible lending rules start to bite.’”

The fact that lending rules were so irresponsible in the first place is a testament to how comprehensively policymakers, regulators, and enforcers were corrupted and captured by the REIC. Lengthy prison sentences are the only appropriate response for such willful dereliction of duty and betrayal of the public interest.

Ontario police rescue 43 ‘modern day slaves’ from Mexico
The Seattle Times-14 hours ago
They allegedly were made to pay the traffickers large sums of money for transportation and housing, and only were allowed to keep less than $50 a month in …

My God… I’am a BC resident and the snarky “well now you’ve done it” attitude about policies aimed at not selling out our children’s future is mind boggling. These people cannot understand that financial manias come to a bitter end no matter who you blame. Wonder who the Bitcoin crowd are blaming…